Yumanity Reverse Merges with CF Drug Developer Proteostasis
August 24, 2020
Rare Daily Staff
Yumanity Therapeutics is reverse merging with public biotech Proteostasis Therapeutics, and its shares will trade on the Nasdaq Global Market under the ticker “YMTX.”
The combined company will leverage a common scientific expertise in the area of protein misfolding to advance Yumanity’s pipeline of innovative, disease-modifying programs for neurodegenerative diseases.
Yumanity’s first clinical-stage product candidate, YTX-7739, is currently in a phase 1 study for the treatment and disease modification of Parkinson’s disease. Yumanity is also advancing several additional candidates for other neurodegenerative disorders, including dementia with Lewy bodies, multi-system atrophy, and the rare disorders amyotrophic lateral sclerosis (ALS) and frontotemporal lobar dementia (FTLD).
“The combination of Proteostasis and Yumanity brings together two technologies rooted in a shared scientific legacy of protein misfolding as the basis of disease, as well as capabilities and resources that offer shareholders a broad platform for value creation,” said Meenu Chhabra, president and CEO of Proteostasis Therapeutics.
Yumanity, which has raised more than $100 million from a strong investor syndicate, also has a potential $500 million strategic research collaboration with Merck for the discovery and development of novel agents for the treatment of ALS and FTLD.
When the merger closes, Richard Peters, president, CEO, and director of Yumanity, will become president, CEO, and director of the combined company.
“Yumanity’s state-of-the-art R&D efforts and deep insights into new potential targets to treat neurodegenerative diseases places us on a rapid trajectory toward our goal of revolutionizing the treatment of these disorders. Our merger with PTI should enable the combined company to grow faster, deliver potential therapies to patients more quickly and create sustainable shareholder value well beyond what either of us would achieve separately,” said Peters.
Proteostasis also said it is pursuing a strategic transaction related to its proprietary CFTR modulators for the treatment of cystic fibrosis (CF), and plans to share proceeds from any monetization of its CF assets through contingent value rights. PTI stockholders of record as of the close of the merger would receive a portion of any upfront payment and CVRs entitling the holders to all net proceeds from any future milestones derived from the grant, sale or transfer of rights by PTI through a transaction completed from now until the closing of the merger. PTI stockholders of record would also be entitled to a portion of any net proceeds from a transaction completed within nine months of the closing of merger.
In December 2019 Proteostasis reported positive topline results from a global phase 2 of a triple combination of its modulators in cystic fibrosis patients 18 years of age and older with the most common mutation F508del. Data from a current study of 502 subjects is expected in the fourth quarter of 2020.
Under the terms of the merger agreement, PTI will acquire all outstanding shares of Yumanity in exchange for newly issued shares of PTI common stock. Upon completion of the proposed acquisition, it is anticipated that existing PTI shareholders will own approximately 32.5 percent of the combined company and Yumanity shareholders will own approximately 67.5 percent of the combined company. Following completion of the merger, the Yumanity Board of Directors will be expanded to nine persons to include the appointment of two current Proteostasis directors.
The transaction has been approved by the boards of directors of both companies and is expected to close in the fourth quarter of 2020, subject to customary closing conditions, including approval of the merger by the shareholders of PTI.
In conjunction with the merger announcement, PTI has reduced its workforce by 79 percent, with five full time employees supporting the proposed merger transaction and strategic efforts related to PTI’s CF assets.
“Today’s announcement brings together two organizations that share a common scientific heritage in the science of protein misfolding and brings that science one step closer to novel solutions for patients suffering from the debilitation of neurodegenerative diseases,” said Tony Coles, chairman and co-founder of Yumanity Therapeutics. “We look forward to continuing this important clinical work on behalf of patients as we make this transition to becoming a public company.”
Photo: Richard Peters, president, CEO, and director of Yumanity
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